Applicants can submit a fake name and social security number, and no
one even checks—not the government, not insurers, not Obamacare
contractors. This is the finding of a recent investigation by the
federal Government Accountability Office, as described in The New York Times and Reason magazine.
This matters because most of the cost of health insurance policies on
the exchanges is picked up by taxpayers through tax credits, to the
tune of billions of dollars a year. (87% of Healthcare.gov customers are getting taxpayer subsidies to purchase health insurance, with taxpayers on average footing 76% of the bill.)
Applicants have included documents showing their income is too high to qualify for a subsidy, and received a subsidy anyway.
As Reason magazine observes,
“neither the administration, which wants to sign up as many people as
possible regardless of actual eligibility, nor the insurers, which get
paid for each person who signs up, have much of an incentive to make the
system work better.”
As Peter Suderman noted at Reason,
On January 1 . . . former Health and Human Services Secretary Kathleen Sebelius submitted a letter
to the president. On the very first page of the letter, Sebelius
personally certified that Obamacare’s health insurance exchanges “verify
that applicants for advance payments of the premium tax credit and
cost-sharing reductions are eligible for such payments and reductions”
as required by the law. “When a consumer applies . . . [the exchange]
verifies application information provided by the consumer” in order to
assess eligibility.
In short, when people apply for Obamacare’s
health insurance subsidies, there’s a robust, reliable system in place
to check their documentation . . .But as it turns out, there isn’t. .
.Not one that actually works, or even really attempts to work.
Undercover investigators from the
Government Accountability Office (GAO) spent some time this year
attempting to see if it would be possible to get subsidies using false
application information. They set up fake names and Social Security
numbers that aren’t real, then claimed citizenship or legal residence, according to the AP,
which obtained an early copy of the GAO report. They submitted
applications with income amounts that should have been too high to get
subsidies. In other words, they fed the system blatantly fraudulent
information that should have been swiftly rejected.
But the majority of their attempts were successful anyway (. . .The New York Times reports 11
of 12). Indeed, the agency is still paying its share of the premiums on
those accounts, because the Obama administration, which certified the
validity of its subsidy verification system, just a few months ago,
hasn’t caught on to the fraudulent accounts yet. . .The lone rejection
occurred when the GAO investigator refused to supply a Social Security
number at all. . .The federal contractor supposedly in charge of weeding
out fraudulent applications told the GAO that “it does not seek to detect fraud and accepts documents as authentic unless there are obvious alterations.” . . .
The upshot, then, is this: Not only did the
administration not set up a working verification system, they lied
about it and said they did.
These tax credits awarded to participants in the Obamacare exchanges have eligibility requirements that operate as massive marriage penalties and work disincentives. The Congressional Budget Office estimated those work disincentives may shrink the number of people employed in America by two million people. That is one reason why analysts at institutions such as Bank of America expect Obamacare to increase the budget deficit. The GAO estimated in a 2013 report that Obamacare will increase the long-term federal deficit by $6.2 trillion."
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